International Solar Alliance Approves Payment Guarantee Mechanism for Solar Projects in Africa

• India and France re-elected President and Co-President of the ISA Assembly for a period of two years and 8 new Vice-President countries were announced.
• ISA Assembly approved the Solar Facility, a payment guarantee mechanism to mitigate risks associated with solar projects in Africa.
• ISA Assembly approved SolarX Grand Challenge to promote entrepreneurship and innovation in solar.

The Fifth Assembly of the International Solar Alliance was inaugurated on Tuesday by Shri Raj Kumar Singh, Minister of Power and New & Renewable Energy, India in his capacity as the President, International Solar Alliance. Ministers from 20 countries and delegates from across 110 Member and Signatory countries and 18 prospective countries joined the inaugural ceremony of the 5th ISA Assembly.

During the Fifth ISA Assembly, the Republic of India and the Republic of France were unanimously elected as the President and the Co-President of the ISA Assembly respectively, for a period of two years. New Vice-Presidents of the Standing Committee of the ISA Assembly – Somalia and Mali (Africa region), Denmark and Sweden (Europe & others), Tuvalu and Bangladesh (Asia Pacific), Venezuela and Reublic of Dominica (Latin America) were also announced.

The ISA Assembly approved the Solar Facility, a payment guarantee mechanism which is expected to stimulate investments into solar through two financial components: Solar Payment Guarantee Fund and Solar Insurance Fund. The Solar Facility is expected to stimulate high potential solar technologies, by attracting private capital to flow into underserved markets in Africa, while ensuring a payment and insurance mechanism as a first loss guarantee. The ISA will soon operationalize Solar Facility to crowdsource investments from various donors across the globe and proposed projects in Africa will be able to purchase payment guarantees or partial insurance premium from these funds.

The ISA Assembly also approved the SolarX Grand Challenge, which is planned to focus on innovation and start-ups, particularly decentralized solar energy applications that contribute to livelihoods, such as agriculture, health, and small-scale industrial applications. This will foster a three-fold benefit– promotion of the solar energy sector, thinning of the gap of the energy crisis, and promoting a solar start-up ecosystem.

The Assembly is the apex decision-making body of ISA, in which each Member Country is represented. This body makes decisions concerning the implementation of the ISA’s Framework Agreement and coordinated actions to be taken to achieve its objective. The Assembly meets annually at the ministerial level at the ISA’s seat. It assesses the aggregate effect of the programmes and other activities in terms of deployment of solar energy, performance, reliability, cost, and scale of finance. The Fifth Assembly of the ISA is deliberating on the key initiatives of ISA on three critical issues energy access, energy security, and energy transition.

Author: Bryan Groenendaal